Call buyers take the wheel in Tesla
David Russell | email@example.com
optionMONSTER's Heat Seeker monitoring system detected the purchase of 5,000 January 55 calls for $1.85 this morning. Volume is more than 100 times the strike's open interest at the beginning of session, clearly showing that this is fresh buying.
TSLA is trading at $38.97 today, up 2.2 percent on the session and 38 percent in the last six months. The shares are within striking distance of their all-time peak of $39.95 in March, so today's call buyer is looking for a breakout followed by a further bullish run.
The contracts have a delta of 0.20, meaning they will appreciate by about $0.20 for every $1 that the maker of electric cars rises. That will leverage a move of about 28 percent in the stock price into a gain of more than 100 percent in the options. (See our Education section)
While the auto maker's quarterly results have been mixed, investors have been focusing on improving margins and the promise of its Model S sedan.
Total option volume is slightly above average so far today, with calls outnumbering puts by more than 10 to 1.